IDEAS home Printed from https://ideas.repec.org/a/bpj/bejmac/v21y2021i2p473-507n12.html
   My bibliography  Save this article

Delegating Optimal Monetary Policy Inertia in a Small-Open Economy

Author

Listed:
  • Ida Daisuke

    (Faculty of Economics, Momoyama Gakuin University, 1-1, Manabino, Izumi, Osaka 594-1198, Japan)

  • Okano Mitsuhiro

    (Faculty of Economics, Osaka Gakuin University, 2-36-1 Kishibeminami, Suita, Osaka 564-8511, Japan)

Abstract

This paper explores the delegation of several targeting regimes in a small open new Keynesian (NK) model and examines how central banks overcome stabilization bias in a small open NK model. Results indicate that both speed limit and real exchange rate targeting can carry the isomorphic properties of optimal monetary policy over to the closed economy. In addition, neither nominal income growth targeting nor CPI inflation targeting replicates a commitment policy. These findings provide new implications for optimal monetary policy in an open economy.

Suggested Citation

  • Ida Daisuke & Okano Mitsuhiro, 2021. "Delegating Optimal Monetary Policy Inertia in a Small-Open Economy," The B.E. Journal of Macroeconomics, De Gruyter, vol. 21(2), pages 473-507, June.
    • Handle: RePEc:bpj:bejmac:v:21:y:2021:i:2:p:473-507:n:12
    DOI: 10.1515/bejm-2020-0181
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejm-2020-0181
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejm-2020-0181?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ida, Daisuke & Okano, Mitsuhiro, 2023. "Optimal monetary policy delegation in a small-open new Keynesian model with robust control," Economic Modelling, Elsevier, vol. 120(C).
    2. Ida, Daisuke, 2023. "Liquidity-constrained consumers and optimal monetary policy in a currency union," Journal of International Money and Finance, Elsevier, vol. 131(C).

    More about this item

    Keywords

    optimal monetary policy; targeting regime; commitment; discretion;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejmac:v:21:y:2021:i:2:p:473-507:n:12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.